Wheat Market Snapshot

Each quarter, Northwest Farm Credit Services updates more than 15 different commodities through their Market Snapshots. Northwest FCS Vice President of Market Research and Development Michael Stolp shares details from the second quarter results of the wheat Market Snapshot.

Stolp: “Most Northwest wheat producers benefitted from May and June rains. Montana received up to 10 inches of precipitation, boosting yield expectations above average. Precipitation deficits in Washington and Northern Idaho were stabilized with mid- and late-June rains, supporting an outlook for average yields. Growers in North Central and Northeastern Oregon continue to face dry conditions and the prospect of below average yields. Growers are likely to find a weaker market than last year. Although world wheat ending stocks are only forecast up slightly in 2013/14, a large corn crop may drive feed grain and wheat prices lower. The USDA projects the season-average farm price for all wheat between $6.25 and $7.55 per bushel; down from the record $7.80 per bushel projected for 2012/13. Northwest FCS estimates wheat producers’ break-even price between $6.50 and $7.00 per bushel.”

The Market Snapshot gives this additional overview: Although farmers in Washington and Northern Idaho have struggled with below average precipitation, many have sprayed for rust, noting infestations associated with limited rain, but cooler temperatures. The costs of spraying for rust are approximately $10 per acre (including aerial application).

The Snapshot states that in drier areas, crop insurance will play a key role in offsetting producers’ losses where yields are below average. Overall, crop insurance should assure wheat growers’ financial security in 2013.